Novartis posts 10 pc drop in Q2 net profit
Novartis AG posted 10 percent drop in second quarter net profit due to shifts in currency values and higher financing costs, but said underlying growth was boosted by advances in its pharmaceuticals division.
By Agencies |
GENEVA: Drug maker Novartis AG posted Thursday a 10 percent drop in second quarter net profit due to shifts in currency values and higher financing costs, but said underlying growth was boosted by advances in its pharmaceuticals division.
The profit of $2 billion was down from $2.3 billion in the same period of 2008, but the Basel-based company said its pharmaceuticals division performed well.
``I am pleased that our pharmaceuticals business continues to deliver double-digit underlying growth, driven by the strong momentum of our recently launched products,'' said Chief Executive Daniel Vasella.
Vasella said the company was helped by its introduction of the new Afinitor drug against kidney cancer in the United States and by the first approval for Ilaris as a new biologic therapy for auto-inflammatory diseases.
``We continue to expect record underlying results in constant currencies based on innovation and productivity initiatives,'' Vasella said, adding that the company was advancing well in efforts to produce a vaccine against swine flu. Clinical trials are beginning this month, he said.
Net sales were $10.5 billion, down 2 percent from $10.7 billion in the year-earlier quarter. Without the effect of shifts in the currency markets, net sales rose 8 percent in local currencies, the company said.
Sales for the vaccines and diagnostics division were down 15 percent in local currencies partly because the same quarter of 2008 benefited from deliveries of vaccines for a bird flu outbreak.
The company said its higher financing costs included a euro1.5 billion bond issued during the quarter.
Shares rose 2.3 percent to 44.70 Swiss francs ($41.34) on the Zurich exchange after the release of the earnings report.
Analysts said the results slightly exceeded their expectations, especially in pharmaceuticals.
Bank Vontobel in Zurich said that the driving force was the generally strong demand for Novartis' best-selling anticancer drug Glivec _ known as Gleevec in the United States; Lucentis, for patients with wet age-related macular degeneration, a form of blindness; Exjade, which stops dangerous iron buildup in frequent blood transfusion patients; and the high-blood-pressure treatment Exforge.
Zuercher Kantonalbank noted that Tekturna, another high-blood-pressure treatment known as Rasilez outside of the United States, also has had ``solid growth.''
The ZKB analysts said the feared sales decline of the best-selling hypertension drug Diovan failed to materialize. The bank says it now expects no major drop in sales before Diovan's patent expires in 2012, even as generics enter the market.
The profit of $2 billion was down from $2.3 billion in the same period of 2008, but the Basel-based company said its pharmaceuticals division performed well.
``I am pleased that our pharmaceuticals business continues to deliver double-digit underlying growth, driven by the strong momentum of our recently launched products,'' said Chief Executive Daniel Vasella.
Vasella said the company was helped by its introduction of the new Afinitor drug against kidney cancer in the United States and by the first approval for Ilaris as a new biologic therapy for auto-inflammatory diseases.
``We continue to expect record underlying results in constant currencies based on innovation and productivity initiatives,'' Vasella said, adding that the company was advancing well in efforts to produce a vaccine against swine flu. Clinical trials are beginning this month, he said.
Net sales were $10.5 billion, down 2 percent from $10.7 billion in the year-earlier quarter. Without the effect of shifts in the currency markets, net sales rose 8 percent in local currencies, the company said.
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Sales for the vaccines and diagnostics division were down 15 percent in local currencies partly because the same quarter of 2008 benefited from deliveries of vaccines for a bird flu outbreak.
The company said its higher financing costs included a euro1.5 billion bond issued during the quarter.
Shares rose 2.3 percent to 44.70 Swiss francs ($41.34) on the Zurich exchange after the release of the earnings report.
Analysts said the results slightly exceeded their expectations, especially in pharmaceuticals.
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Bank Vontobel in Zurich said that the driving force was the generally strong demand for Novartis' best-selling anticancer drug Glivec _ known as Gleevec in the United States; Lucentis, for patients with wet age-related macular degeneration, a form of blindness; Exjade, which stops dangerous iron buildup in frequent blood transfusion patients; and the high-blood-pressure treatment Exforge.
Zuercher Kantonalbank noted that Tekturna, another high-blood-pressure treatment known as Rasilez outside of the United States, also has had ``solid growth.''
ADVERTISEMENT
The ZKB analysts said the feared sales decline of the best-selling hypertension drug Diovan failed to materialize. The bank says it now expects no major drop in sales before Diovan's patent expires in 2012, even as generics enter the market.
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